Future of Financial Advisers in Singapore

Following is an extraction from Former NTUC Income CEO, Mr Tan Kin Lian's blog and my comment in his posting. Its my view of the Financial Advisory Industry in the next 5 to 8 yrs

++ Qte ++

There is a useful role for financial advisers in giving impartial advice to customers. They should be paid a fee for the time spent. Many people told me that they are willing to pay a fee of $200 for financial advice.

The fee of $500 or more that is currently charged by some advisers is too high for most customers.It is possible for the adviser to reduce the fee to $200, if they are not required to spend too much time with the client.

The client can be asked to read a FAQ (frequently asked question) on financial matters before they see the adviser. It will be possible for the adviser to do a good job within 2 hours.

++ Unqte ++

My Comment...

* The above idea is a novel. Most people are unlikely to pay for financial services under current standards.
* Over short term, things will remain as it is. Commissioned agents and Independent Financial Advisors will be here to stay.
* Over mid term, commission structure will be reduced due to competitive forces. Agents will be reduced significantly and a transition in the industry sets in.
* Over long term, 2 types of financial adviser co-exist.
1) Fixed salaried staffs from banks and insurance companies that gives insurance and investment advices
2) Pure Financial Advisory firms with proper investment analysis tools and a very systematic approach in financial planning.

I personally feel that our cohort of Independent Financial Advisors are not really independent and unbias with their views.